Sharing Leadership on Corporate Boards: a Critical Requirement

Executive Summary Critical to the success of a high performance board is the ability of its directors to share leadership and to work as a dynamic team. Yet historically boardrooms have proven to be one of the most difficult places to build an effective team. Numerous factors work against boards operating as teams such as the small amount of time directors have together, limited access to critical information, and highly centralized approaches to board leadership. To overcome these challenges, this article highlights the approaches that boards can and should undertake to improve their effectiveness as an operating team. For example, boards can more carefully select directors based on their orientation towards teamwork and with an eye towards how their expertise complements fellow directors. Shifting from a CEO as chairman approach to a non-executive chairman model can foster the sharing of leadership and the promotion of a team orientation among directors. A leadership style on the part of the chair that promotes teamwork is particularly critical. Finally, evaluating boards as teams as well as careful attention to the overall size of the board and committees can encourage greater teamwork. A critical attribute of a high performance corporate board is its ability to act as a team. The complex issues Boards deal with – corporate oversight, acquisitions and mergers, and CEO succession-are best handled by combining the expertise of multiple board members and having decision processes that move power and leadership to where expertise exists. Yet few boardrooms today can be called exemplars of teamwork. There are leadership, power, information, and membership characteristics that work against genuine teamwork. For example, the leader of the board is usually the CEO. He, or in rare cases she, typically is responsible for determining who is on the board and for setting the agenda of board meetings. This unitary leadership structure can discourage teamwork in boardrooms. It all too often leads to a 'hub and spoke' leadership dynamic with the CEO as the controlling hub and individual directors relating directly to him or her rather than sharing leadership and working with each other. As a result of corporate scandals and underperforming firms, boardrooms have come under pressure to act independently of the CEO and to have multiple leadership roles. For example, alternative leadership roles such as non-executive chairmen and lead directors have gained in popularity. In addition, committees of the board have become more powerful and …